City officials balk at tax-freeze plan from Gov. Cuomo

February 5, 2014

JOHNSTOWN - City Treasurer Michael Gifford said Monday the city may have a tougher time putting together a spending plan if Gov. Andrew Cuomo's two-year tax freeze proposal becomes law.

"We will have a much more difficult time with our budget," he told the Common Council at City Hall.

Cuomo last month proposed a two-year freeze on property taxes in school districts and localities that stay within the 2 percent tax cap. The proposal would have to be adopted into law by the state Legislature.

Gifford predicted the city would have a tougher time crafting a budget in the next one to three years. He said under such a scenario, as proposed by the governor, the city would be "steered" to a very hard tax levy cap of 2 percent.

"Thank God it's only a proposal," said Mayor Michael Julius.

Gifford also commented on Cuomo's proposal that will freeze property taxes for two years, subject to two conditions.

"It's something to watch," Gifford said. "It's a proposal."

In year one, the state will only provide tax rebates to homeowners who live in a jurisdiction that stays within the 2 percent property tax cap. In year two, the state will only provide tax rebates to homeowners who live in a locality that stays within the cap and also agrees to implement a shared services or administrative consolidation plan.

Gifford said the city has been able to stay within the state tax cap the last couple years, but the city can only use fund balance to balance the budget "for so long."

The city in December adopted an $11.7 million 2014 city budget with a 2.8 percent property tax-rate increase. As the tax caps fluctuate above and below 2 percent, the city was still able to stay within the property-tax cap set by the state.

The city in November 2012 also adopted an $11 million city budget for 2013 with a tax-levy increase of 4.6 percent, slightly below the state's tax-levy cap that year.